Regulation of gene expression is critical to both healthy development and disease. Multicellular organisms contain the same genetic information in most of their somatic cells, yet each cell expresses a unique set of genes and adopts a distinct cell fate. Aberrant regulation of expression of genes leads to developmental defects and diseases such as cancer. Dosage compensation is a specialized form of gene regulation affecting many, or most, genes on entire chromosomes, to balance gene expression between the sexes. In the worm Caenorhabditis elegans, dosage compensation is accomplished by a condensin-like dosage compensation complex (DCC), which binds both X chromosomes in XX hermaphrodites, to halve gene expression. Condensin is best known for its role in packaging and segregating chromosomes during mitosis and meiosis. However, evidence from several systems indicates that condensin is also involved in the regulation of gene expression. How the DCC, and by extension condensin, regulates gene expression is not known. The long-term goals of this project is to decipher how the gene regulatory and mitotic chromosome segregation roles of condensin are mechanistically related. This proposal is aimed at elucidating the mechanism of condensin-action during worm dosage compensation, how it is established at the time when cells transition from plasticity to differentiation, and how repression is maintained subsequently. The proposal tests the hypothesis that dosage compensation function involves placing a set of chromatin marks on dosage compensated X chromosomes, via recruitment of chromatin modifying complexes. These chromatin modifications set up a chromatin environment, which inhibits RNA polymerase II binding as well causes polymerase to stall during early elongation. The proposal also aims to elucidate the mechanism of transcription regulation by studying how the transcription machinery is affected during dosage compensation. Finally, the proposal also investigates how DCC-mediated repression is initiated and maintained, by studying the timing of appearance of dosage compensation mediated chromatin marks in various mutants with defects in differentiation, by studying how the gene triggering dosage compensation is regulated in early development, and by turning off DCC function after the initial sensitivity period using conditional mutants.